WAR WITH CHILE

The war with Chile
developed over the disputed, nitrate-rich Atacama Desert. Neither Peru,
nor its ally, Bolivia,
in the regional balance of power against Chile, had been able to
solidify its territorial claims in the desert, which left the rising
power of Chile to assert its designs over the region. Chile chose to
attack Bolivia after Bolivia broke the Treaty of 1866 between the two
countries by raising taxes on the export of nitrates from the region,
mainly controlled by Chilean companies. In response, Bolivia invoked its
secret alliance with Peru, the Treaty of 1873, to go to war.

Peru was obligated, then, to enter a war for which it was woefully
unprepared, particularly since the antimilitary Pardo government had
sharply cut the defense budget. With the perspective of hindsight, the
outcome with Peru's more powerful and better organized foe to the south
was altogether predictable. This was especially true after Peru's
initial defeat in the naval Battle of Iquique Bay, where it lost one of
its two iron-clad warships. Five months later, it lost the other,
allowing Chile to gain complete control of the sea lanes and thus to
virtually dictate the pace of the war. Although the Peruvians fought the
superior Chilean expeditionary forces doggedly thereafter, resorting to
guerrilla action in the Sierra after the fall of Lima in 1881, they were
finally forced to conclude a peace settlement in 1883. The Treaty of Ancón
ceded to Chile in perpetuity the nitrate-rich province of Tarapacá and
provided that the provinces of Tacna and Arica would remain in Chilean
possession for ten years, when a plebiscite would be held to decide
their final fate. After repeated delays, both countries finally agreed
in 1929, after outside mediation by the United States, to a compromise
solution to the dispute by which Tacna would be returned to Peru and
Chile would retain Arica. For Peru, defeat and dismemberment by Chile in
war brought to a final disastrous conclusion an era that had begun so
auspiciously in the early 1840s with the initial promise of guano-led
development.